About 30 elderly and disabled residents of two north Spokane assisted living centers have less than two weeks to find new homes before bankruptcy proceedings force the operations’ owner to close them.
Long-term care advocates say it may be a challenge relocating patients covered by Medicaid as Spokane Valley-based Alternative Care Corp. prepares to close Cornerstone Place, 825 W. Hawthorne Road, and Heritage House, 9626 N. Colfax Road.
“It will be an enormous hardship for the residents to move,” said Louise Ryan, the state’s long-term care ombudsman who was appointed by the court to monitor residents during the bankruptcy. “And some of them may not really transition well, even if they have the best of circumstances with the move.”
Alternative Care, headed by Jim Reinking, filed for Chapter 11 bankruptcy in April, listing debts of more than $3.4 million. It owes about $2.4 million of that to a subsidiary of U.S. Bank for a loan that’s been overdue for four years, according to documents filed in U.S. Bankruptcy Court.
Minneapolis-based Sand Trap Properties Inc. has scheduled a foreclosure sale for Sept. 21.
An attorney for Alternative Care declined to comment. Phone messages left for Reinking were not returned by late Tuesday.
Housing in assisted living centers for Medicaid recipients is becoming increasingly limited because some companies believe reimbursement rates are too low compared to private payments, Ryan said. Unlike assisted living centers, nursing homes offer more skilled care and are required to take Medicaid patients if on a Medicaid contract, officials said.
Twenty-four of Alternative Care’s residents use Medicaid, said Christine Renner, deputy regional administrator for Home and Community Services, which is working to relocate tenants. Of the seven who pay privately, at least four have found new places, she said.
“We are working diligently to make sure that everyone is placed and in a safe setting and hopefully in a place that will be in their best interest,” Renner said, adding she’s sure even Medicaid clients will be placed.
There are 54 boarding homes like Cornerstone in Spokane County, with more than 2,600 beds, Ryan said. It’s unclear how many of those accept Medicaid patients.
If residents aren’t relocated in time, Alternative Care would still be legally responsible for providing services, so “there will have to be services one way or another,” Ryan said.
While Reinking gave residents 30-day written notice required by the court, he conveyed “mixed messages” by saying he was working on financial plans to bail out the buildings, Ryan said.
“People didn’t move out because there was some hope that they would be able to pull it out,” said Linda Petrie, a regional long-term care ombudsman based in Spokane.
Tenants at Cornerstone, with 19 beds, have bonded like family, said tenant and Medicaid recipient Comeletta “Commie” Wavada, 77.
“We keep wishing we didn’t have to be split up, you know?” she said. “A lot of us are going to be hard to place, especially us.”
She has Parkinson’s disease and undergoes kidney dialysis three times a week, and her husband and roommate James, 81, suffers from severe dementia. Although he still doesn’t understand Cornerstone is his home, he’s settled into a routine there, Commie Wavada said.
“We found this place, which was heaven because we’ve been together for 59 years and this was just one place that would take us both and let us be together,” she said Tuesday, wiping away tears in her family photo-adorned double room.
Some residents are blind and have memorized the layout of Cornerstone, she said. Jim Wavada, the couple’s grown son, took several days off work this week to search for a new place. But he found many operations have filled their quota of beds set aside for Medicaid patients or want people to pay privately for a few years before using Medicaid, he said.
“It’s a really tragic situation,” he said.
The loan has been overdue since July 2003, according to court documents filed for Sand Trap, which had been scheduled for a foreclosure sale April 13 but was stayed by a court order.
Alternative Care had until July 25 to find a suitable buyer or refinance the loan but didn’t submit details of a $1.45 million offer until early August, according to court documents.
An attorney for Sand Trap declined to comment.
On Monday, federal court bankruptcy judge Patricia Williams denied requests by Alternative Care to stop the foreclosure sale.
The bankruptcy case follows a legal feud between Reinking and his younger brother Jan Reinking, 56, of Auburn, Wash.
Last year, a King County court jury awarded Jan Reinking and his wife about $530,000 and half the shares of Alternative Care stock, ordering a lien be placed on the property and assets of the company. While Jan Reinking is the largest creditor behind Sand Trap, he likely won’t receive any money, said Paul Simmerly, a Bellevue-based attorney.
Jan Reinking alleged Jim Reinking wrongly used money from Alternative Care for personal purposes and ignored advice that could have saved the business.